Growth funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes.
Meanwhile, large-cap funds are ideal investment options for those seeking a high return potential that comes with lower risk than small-cap and mid-cap funds. These funds have exposure to large-cap stocks, providing a long-term performance history and assuring more stability than what mid or small caps offer.
Below we share with you three top-ranked large-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.
Vanguard U.S. Growth Portfolio Investor (MUTF:VWUSX) seeks long-term growth of capital. VWUSX invests in large-capitalization stocks of seasoned U.S. companies with records of superior growth. The fund chooses companies with strong positions in their markets and reasonable financial strength. Management invests in stocks of large capitalization companies that offer the best available combination of relative earnings growth and attractive valuation. VWUSX distributes dividends and capital gains in December. Vanguard US Growth Investor has a three-year annualized return of 12.9%.
VWUSX has an expense ratio of 0.47% as compared to the category average of 1.19%.
Schwab Large-Cap Growth (MUTF:SWLSX) invests the majority of its assets in common stocks of large-cap companies with a market capitalization similar to those in the Russell 1000 Index. Schwab Large-Cap Growth has a three-year annualized return of 10.6%.
As of June 2016, SWLSX held 118 issues with 4.57% of its assets invested in Apple Inc. (NASDAQ:AAPL).
Loomis Sayles Growth Fund A (MUTF:LGRRX) seeks long-term growth of capital. LGRRX invests in equities such as common stocks and warrants of large cap companies. The fund may also invest, to a lesser extent, in small- and mid-cap companies. LGRRX invests in multiple sectors and industries. Loomis Sayles Growth A has a three-year annualized return of 14.8%.
LGRRX has an expense ratio of 0.92% as compared to the category average of 1.19%.